Thurlow v. Berry

• Decision Date: 30 October 1947
• Docket Number: 6 Div. 580.
• Citation: 249 Ala. 597,32 So.2d 526
• Parties: THURLOW et al. v. BERRY et al.
• Court: Alabama Supreme Court

32 So.2d 526

249 Ala. 597

THURLOW et al. v. BERRY et al.

6 Div. 580.

Supreme Court of Alabama

October 30, 1947

A A. Carmichael, Atty. Gen., and Bowers, Dixon & Dunn Frank M. Dixon, Henry Upson Sims, and Wm. Logan Martin, all of Birmingham, for appellants.

Lange, Simpson, Robinson & Somerville, Jas. A Simpson, R. L. Lange, Cabaniss & Johnston, Forney Johnston, and Jos. F. Johnston, all of Birmingham, and Phillips Ketchum, of Boston, Mass., for appellees.

BROWN Justice.

This appeal is prosecuted by the complainants who filed the original bill from the final decree of the circuit court, sitting in equity, construing the will of Harvey G. Woodward, deceased, who died in Birmingham, Alabama, on the 18th day of November, 1930.

The decree construes what the parties denominate the 'backlog provision,' the major bases of the controversy between the parties, as administrative and directory--not mandatory--and subject to the doctrine of approximation, more appropriately the doctrine of equitable deviation; and directs the board of governors to proceed with the construction and maintenance of the first unit of the school provided for in Section (j) of the Tenth Paragraph of said will.

The equity of the original bill filed by Thurlow and Martin, a minority of the Board of Governors, against the other members of the board, the fiscal trustee First National Bank of Birmingham, and the Massachusetts Institute of Technology, was not questioned on the first appeal nor is it questioned on this appeal.

The bill as last amended sought an interpretation of the will and the advice of the court in respect to the administration of the trust. The only question involved in the former appeal was the sufficiency and equity of the cross-bill filed by the majority members of the Board of Governors, which sought an interpretation of the declaration of trust by the Alabama Educational Foundation, a corporation organized by the testator in his lifetime to which he had conveyed considerable property as an educational foundation for ultimately carrying out the educational scheme outlined in his will.

The equity and sufficiency of the cross-bill was upheld insofar as it sought interpretation of the declaration of trust by the educational foundation as related to the will. And on that appeal this court refused to construe the will in advance of the final decree of the circuit court. Thurlow et al. v. Berry et al., 247 Ala. 631, 25 So.2d 726.

After the decision on the former appeal the cross-bill was elaborately amended, praying for specific relief outlined in subparagraphs b, c, d, e and f of the prayer to the cross-bill. Several grounds of demurrer addressed to these subparagraphs are made bases for assignments of error on this appeal, the demurrer having been overruled by the circuit court. Some of these assignments are stressed in argument by appellant. It is sufficient to observe that where a pleading in equity is sufficient in other respects and contains a proper prayer, it is not demurrable, because of a prayer for further but unwarranted relief. Wilks v. Wilks, 176 Ala. 151, 57 So. 776.

Woodward, after making several minor bequests including provision for his wife with respect to which he stated in his will, 'The devises, bequests and provisions made for my wife, Annie Louise Woodward, are in lieu of dower or any distributive share or other interest in my estate, statutory or otherwise,' bequeathed to the First National Bank of Birmingham, Alabama, as fiscal trustee, the residue of his large estate, consisting of real and personal property of the value of more than five million dollars, as a foundation for an educational trust to establish and maintain a system of schools, which he outlined in his holographic will, vesting in the fiscal trustee and its successors the legal title of all the property in said residuary estate, with specific powers in respect to the investment and care of such trust property, some of which is enumerated in Section (c) of said will. The will also names a self-perpetuating Board of Governors constituted of seven men, to act without compensation, including Oscar G. Thurlow, who joined as a complainant in filing the original bill, and Keehn W. Berry, who was named as a defendant in said bill, along with the other members of the board not made complainants, conferring on said Board of Governors numerous and sundry duties and powers, among others:

'The Board of Governors shall be and is hereby expressly charged with the duty of carrying into effect the educational trusts herein provided and of directing the expenditure of the income from said trust estate and the principal thereof for the purpose and in the manner herein provided. To this end I vest in said Board of Governors the power and authority to do any act or thing and to make any expenditure of funds of said trust estate which in the opinion of the said Board of Governors is necessary or desirable in carrying into effect the provisions hereof and the trusts herein created, in accordance with the provisions hereof, subject only to the requirement that said Board of Governors shall act in good faith.'

Another provision in the will is: 'The Board of Governors will find among my papers much data with reference to the school, representing the result of several years investigation by me, and they are directed that my evident intents are to be given preference over their own or other ideas, when not in conflict with five of the Board members; * * *.'

The will further provides:

'The Board of Governors shall keep the Trustee advised of its plans in order that the investment of the funds of the trust estate may be so handled that the directions of the Board of Governors for the expenditure of money may not result in unnecessary embarrassment to the Trustee or loss to the estate in providing such funds when called for. In taking action calling for the expenditure of funds, the Board of Governors shall give consideration to the condition of the trust estate and the nature of the investment thereof and the total value of the trust estate, and so control its expenditure of funds that the disbursement out of the assets of the estate may not impair the trust estate to the extent that it may endanger the full consummation of the plan herein provided. They may expend principal for school sites and buildings and as specifically provided.'

The 'Backlog Provision'

'To avoid expenditure in excess of that justified by the size of the trust estate, I direct that before making an expenditure for the original unit of the school, whatever its size, or any subsequent unit or addition to an existing unit, the Board of Governors shall first make or cause to be made a careful estimate of the cost of such unit or addition and the amount required annually for the upkeep and operation thereof. The Board shall make the expenditure for such unit only if and when there shall remain in the trust estate property or securities other than school properties, after deducting the estimated cost of such unit, which will produce income, after paying all expenses other than the cost and expenses connected with the operation of the schools, equal to 200% of the actual cost of operation of the unit or units of the school then in operation, if any, and the estimated cost of operation of the unit, the construction of which is then contemplated; provided, further, that in addition to the foregoing there shall be other income producing assets (excluding school properties) of the value of Three Million Dollars ($3,000,000.00), the income from which shall be added to said Three Million of Dollars to help provide the funds for the next unit. 'School properties' as used herein means the school site, buildings, equitpment and other properties actually used in the conduct of the school.

'If, after completion of the second unit, it should be apparent to the Board of Governors, that Three Million Dollars is more or less than needed for the basis of another unit, then they may change the amount, to such figure, from time to time, as they deem advisable.' [Italics supplied.]

Following the 'backlog provision,' the character of the school is outlined and the beneficiaries of the trust are enumerated as 'young white boys, sound and normal in mind and body (cripples excluded), so that on their entrance into manhood they, in the practice of the principles of truth, morality and justice and by right living, may assist in elevating American citizenship * * *.' Following this the testator observed: 'I charge upon the Board of Governors hereunder the duty to and I direct that with the trust estate and the income therefrom they shall establish and maintain a school, as hereinafter provided, for the education of such young white boys, complying with the qualifications herein provided.'

As to the teachers who are to vitalize and implement the school as directed in the will the testator observed:

'A headmaster of not under thirty-five or over fifty years of age, who is interested in and likes boys, and knows their psychology, who has had much experience with them, who is not weded to any 'system,' who sees and approves of this scheme as a whole, who has a minimum of prejudices intolerance and of 'cocksureness,' shall be employed at least a year before the school is started and give his entire attention to the needs of the school and preparations for it in all ways. This school, if successful, is to grow in a natural way to the size of two hundred pupils, and become the first unit of the units provided herein--When the first school, in the judgment of the Board of Governors, is reasonably sure of growing as planned, new buildings may be erected, on the same general site, planned as the type of future...